February 5th, 2013

Robotics and the Future of the Middle Class: Gloom or Empowerment?

I recently read an interesting, though depressing, article on how automation/computers are reshaping the workplace. The bottom line numbers: We lost 7.5 million jobs in the 2008 Recession, half of them middle class jobs. The recovery since then has given us 3.5 million jobs, of which TWO percent are middle class jobs. For what it's worth, European middle-class jobs are going away even faster than ours are.

http://news.yahoo.com/ap-impact-recession-tech-kill-middle-class-jobs-051306434--finance.html

Some of those jobs went to China and India, undoubtedly, but even without those losses, automation is taking away blue collar jobs, while computers are taking away the need for a lot of middle management types, accountants and programmers. In the private sector, middle class jobs are treated like damage--something to be fixed through automation or outsourcing.

That attitude hasn't arrived in government yet, at least not most places, but it probably will if the middle class shrinks further, or even stays at current levels. The middle class is the source of most of a government's tax revenue, and always will be. Poor people by definition don't have much money. Beyond a certain wealth level, the rich have enough political and legal resources to make taxing them to the extent of their abilities more expensive than it's worth. Most states and certainly the federal government, are sized for a middle class that didn't lose nearly four million members and even one that they projected to grow from the 2008 levels.

If the middle class shrinks, eventually government employment will have to shrink to fit the reduced revenue, whether directly in the form of colleges shrinking because formerly middle class parents can no longer send their kids there or through other means. A lot of those jobs are middle class too.

We've been through cycles like this before, with automation pushing out handcrafts in the Industrial Revolution and tractors automating farming in the first half of the 1900s. In each case, we've ended up wealthier as a society, though some people lost out in a major way and sometimes the increased wealth came after extended periods of hardship. If you're twenty-something and unemployed, does it really help to know that in twenty years everything will stabilize at a new, higher level and everyone will be richer? Twenty years is half of your working life.

And then there is the question of whether past pushes to automation just happened to create enough new kinds of middle class jobs or there is some economic law that it will always do so. I don't have an answer for that. I'm not sure anyone does. What if computer power obsoletes jobs faster than it creates new ones?  What if what we saw in 2008 was the start of a series of downward steps, masked temporarily by massive government borrowing and spending?

That all sounds like it's leading to doom and gloom, but I'm not sure it is. I have at my disposal computer power that not even the richest person in the world would have had fifty years ago. The computer revolution empowered me, empowered most people one way or the other.

Depending on how the regulatory environment shapes up, robotics may have a similar impact. When the twenty-thousand dollar robot that can do most things a human can do becomes a two thousand dollar robot that can be easily programmed to take a piece of plastic or metal and form it into anything you can design, where does that lead. We think in terms of huge corporations building stuff for us, but I'm not entirely sure they'll have that role twenty or thirty years down the road. Why should they when individuals or small groups can easily program robots and 3D printers to build exactly what they want, rather than what a corporation wants to sell them? Will economies of scale still work for big companies when individuals can download whatever skill set they want into their personal robots and create a personalized tablet computer or a lawnmower or you can go down the street and have a local shop build you a new engine for your car from open source CAD drawings?

The future is going to be an interesting place. More than any past generations we're going to need to be able to see and exploit the possibilities. That means staying flexible in our ideas about what employment is and what government is and can do. As we age, we tend to create a mental world as it ought to be and reject things that don't fit in that world. We won't be able to do that and remain viable. We'll have to learn the new technologies and understand the new possibilities they open up, not just as parts of existing structures but as openings for new kinds of structures.